Last updated on September 2nd, 2020 at 12:46 am
Saving for your children’s milestones can be overwhelming, but with a little preparation and planning, there’s no need to stress. We’ve compiled a few creative ways to save for the major financial milestones that you’ll face as a parent. From saving before your child’s birth, to helping them understand their own retirement planning, we have you covered!
Ways to Save
In order to begin setting aside money for your children’s milestones, you need to know the best options for building your savings. Start by establishing a basic savings account in your childs name with your bank. Build it up with money received as gifts when your children are young, or just add small amounts as they grow. When they’re old enough, the account can be co-owned by you, and will give your child the freedom to save and withdraw as needed. This can teach them great savings skills and also sets them up with a safe amount of funds to begin their savings journey.
A standard brokerage account is another investment that can be made toward saving for your children’s milestones. These accounts allow you to access multiple investments like stocks or mutual funds and can be withdrawn from at any time. By depositing a small amount of money at a time into this account, you can build savings that are out of sight, out of mind and act as a viable emergency fund in the case you need a large sum quickly.
Saving When Expecting & Through the Early Years
Start saving early, preferably before the big arrival! This helps you to stay ahead of the new baby expenses, and gives you peace of mind when entering this exciting chapter of your life. Start by assessing your financial health, and redesign your budget to account for the new addition to your family. Note areas in your budget that you can scale back on to make room for childcare essentials like medical care, food, clothing, and the never-ending demand for diapers. Try to avoid deducting from your savings, and instead pull from your expendable cash. This keeps your personal savings intact and also prevents overspending on non-essential purchases.
As your kids grow, it can become difficult to keep up with their ever-changing needs. Clothes and furnishings will need replacing at a faster rate, and new items might not fit into your budget. Consider buying both items second hand, and donate all used pieces to free up some room in your home. This not only helps your wallet, but also gives you an opportunity to teach your kids about sustainable shopping and ways they can save. If food becomes a high expense as well, visit your local market for fresh, organic produce at a reasonable price. Bring the kids along and teach them about healthy eating, and ways they can support their community in the process.
Saving for Educational Milestones
Education will be one of the largest expenses to save toward, but there are a multitude of options to cover anything from school supplies to college tuition. If your kids are in K-12 and back to school costs are adding up to a little more than planned, set a budget for yourself. Determine the amount that you can spend on each of your kids, and stick to it! This can help you determine what you need as well and prevent over buying. Consider reusing old supplies that might be able to last another year by reusing binders or sharpening old pencils. These items may be small price-wise, but add up quickly, especially if you have more than one child to buy for. For more ways to save on school supplies, check out this article and start saving!
College is another educational milestone that is oftentimes, every parent’s nightmare. But don’t panic just yet! Saving early is the best way to attack this large expense head on, but if you are less prepared, there are plenty of other options to take advantage of. Consider applying for scholarships by talking with your school counselor or the financial aid office at the college your child plans to attend. Loans are also an option with the traditional federal school loans being the most common. These days, families are also considering alternative loan options as well, like borrowing against the equity they’ve built up in their house to take out a home equity loan. Options like this are suitable in the case you have little saved, but incurring debt isn’t always desirable, so be sure to start saving for this milestone sooner rather than later.
Teach Them the Basics
Teaching your children the basics of money management and creative ways to help them save money is a great way to help put them on a path toward financial responsibility. Establish a weekly allowance in exchange for chores around the home. Teach your children about how to save a portion of their earnings in their savings account and not withdraw that money if possible, using the other portion of their earnings as spending cash. This will help them to build savings on their own, while learning the basics of banking.
Sit down and create a budget together when they begin to enter the age of driving and going out too. Sort through their fixed expenses like gas, food, and their cell phone bill, and determine how much is left over for saving and spending. This gives them an idea of how much money they have in expendable cash, and how important it is to have money set aside for necessities. Adjust their budget with them as they get older, looping in a financial advisor when larger decisions need to be made.
Also read —
Teaching Kids About Money — 7 Smart Tips
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